EXHIBIT 4.7
STOCK OPTION AGREEMENT
1. Grant of Option. TelePad, Corporation, a Delaware corporation
(the "Company"), hereby grants to __________ (the "Optionee"), an option to
purchase an aggregate of ______ shares of common stock, $.01 par value ("Common
Stock"), of the Company at a price of $_____ per share, purchasable as set forth
in and subject to the terms and conditions of this Agreement.
2. Vesting, Exercise of Option and Provisions for Termination.
(a) Vesting. This option may be exercised at any time after
__________, 199_, provided that the Optionee remains an advisor to the Company
at all times from the date of the grant of this option through __________, 199_.
Notwithstanding any other provision of this option, if the Optionee voluntarily
terminates his status as an advisor to the Company at any time on or before
__________, 199_, this option shall become null and void in its entirety.
(b) Exercise Period. Except as otherwise provided herein, this
option may be exercised at any time prior to __________, 199_, as to the number
of shares equal to an aggregate of ______ shares. The right of exercise shall be
cumulative so that if the option is not exercised to the maximum extent
permissible at any one time, it shall be exercisable, in whole or in part, with
respect to all shares not so purchased at any time prior to __________, 199_.
(c) Exercise Procedure. Subject to the conditions set forth in
this Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Treasurer of the Company, specifying the
number of shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in cash. Such exercise shall be effective upon
receipt by the Treasurer of the Company of such written notice, together with
the required payment.
(d) Exercise Period Upon Death or Disability. If the Optionee dies
or becomes disabled prior to __________, 199_ this option shall be exercisable,
within the period of three months following the date of death or disability of
the Optionee, by the Optionee or the person to whom this option is transferred
by will or the laws of descent and distribution.
3. Delivery of Shares; Compliance With Securities Laws, Etc.
(a) General. The Company shall, upon payment of the option price
for the number of shares purchased and paid for, make prompt delivery of such
shares to the Optionee, provided that if any law or regulation requires the
Company to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.
(b) Listing, Qualification, Etc. This option shall be subject to
the requirement that if, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares subject hereto
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a condition
of, or in connection with, the issuance or purchase of shares hereunder, this,
option may not be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Board of Directors. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
(c) Agreement by Optionee to Execute Stock Restriction Agreement.
The Optionee hereby agrees to execute a Stock Restriction Agreement,
substantially in the form, and containing the terms and provisions, of the Stock
Restriction Agreement attached hereto as Exhibit A, with respect to any shares
of Common Stock acquired by Optionee pursuant to this option.
4. Nontransferability of Option. Except as provided in paragraph (d)
of Section 2, this option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) nor shall any such rights be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option or of such rights contrary to
the provisions hereof, or upon the levy of any attachment or similar process
upon this option or such rights, this option and such rights shall, at the
election of the Company, become null and void.
5. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option unless and until a certificate representing such shares is duly
issued and delivered to the Optionee. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such stock
certificate is issued.
6. Adjustments.
(a) General. If, as a result of a merger, consolidation, sale of
all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to the outstanding shares of Common
Stock or other securities, the outstanding shares of Common Stock are increased
or decreased, or are exchanged for a different number or kind of shares or other
securities, or additional shares or new or different shares or other securities
are distributed with respect to such shares of Common Stock or other securities,
an appropriate and proportionate adjustment may be made in (i) the number and
kind of shares or other securities subject to this option and (ii) the price for
each share subject to this option, without changing the aggregate purchase price
as to which this option remains exercisable.
(b) Board Authority to Make Adjustments. Adjustments under this
Section 6 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made
-2-
and the extent thereof will be final, binding and conclusive. No fractional
shares will be issued pursuant to this option on account of any such
adjustments.
(c) Limits on Adjustments. No adjustment shall be made under this
Section 6 which would, within the meaning of any applicable provision of the
Code, constitute a modification, extension or renewal of this option or a grant
of additional benefits to the Optionee.
7. Investment Representations; Legend.
(a) Representations. The Optionee represents, warrants and
covenants that:
(i) Any shares purchased upon exercise of this option shall
be acquired for the Optionee's account for investment
only and not with a view to, or for sale in connection
with, any distribution of the shares in violation of the
Securities Act of 1933 (the "Securities Act") or any
rule or regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he has deemed
adequate to obtain from representatives of the Company
such information as is necessary to permit the Optionee
to evaluate the merits and risks of his investment in
the Company.
(iii) The Optionee is able to bear the economic risk of
holding shares acquired pursuant to the exercise of this
option for an indefinite period.
(iv) The Optionee understands that:
(A) the shares acquired pursuant to the exercise of this
option will not be registered under the Securities Act
and are "restricted securities" within the meaning of
Rule 144 under the Securities Act;
(B) such shares cannot be sold, transferred or otherwise
disposed of unless they are subsequently registered
under the Securities Act or an exemption from
registration is then available;
(C) in any event, the exemption from registration under Rule
144 will not be available for at least two years and
even then will not be available unless a public market
then exists for the Common Stock, adequate information
concerning the Company is then available to the public
and other terms and conditions of Rule 144 are complied
with; and
-3-
(D) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any
stock of the Company and the Company has no obligation
or current intention to register any shares acquired
Pursuant to the exercise of this option under the
Securities Act.
By making payment upon exercise of this option, the
Optionee shall be deemed to have reaffirmed, as of the date of
such payment, the-representations made in this Section 7.
(b) Legend on Stock Certificates. All stock 'certificates
representing shares of Common Stock issued to the Optionee upon exercise of this
option shall have affixed thereto a legend substantially in the following form,
in addition to any other legends required by applicable state law:
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares
evidenced by this certificate, filed and made effective under the
Securities Act of 1933, or an opinion of counsel satisfactory to
the Company to the effect that registration under such Act is not
required."
8. Miscellaneous.
(a) Except as provided herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
(b) All notices under this option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designated in writing by either of the
parties to one another.
(c) This option shall be governed by and construed in accordance
with the laws of the State of Maryland.
Date of Grant: TELEPAD CORPORATION
__________, 199_
By:___________________
-4-
OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to
terms and conditions thereof.
OPTIONEE
______________________
-5-
EXHIBIT A
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO THE REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY
MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR
AN INDEFINITE PERIOD OF TIME.
STOCK RESTRICTION AGREEMENT
THIS STOCK RESTRICTION AGREEMENT (this "Agreement") is made this
__th day of 199_, between TELEPAD CORPORATION, a Delaware corporation, (the
"Company"), and _______________ ("Optionee").
For valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Purchase of Shares. Optionee hereby subscribes for and, upon
acceptance hereof, shall purchase, subject to the terms and conditions set forth
in this Agreement, ______ shares (the "Shares") of common stock, $0.01 par
value, of the Company (the "Common Stock"), at a purchase price of $_____ per
Share. The aggregate purchase price for the Shares shall be paid by Optionee by
check payable to the order of the Company or such other method as may be
acceptable to the Company. Upon receipt of payment by the Company for the
Shares, the Company shall issue to Optionee one or more certificates in the name
of Optionee for that number of Shares purchased by Optionee. Optionee agrees
that the Shares shall be subject to the restrictions on transfer set forth in
Sections 2 of this Agreement.
-6-
2. Restrictions on Transfer.
(a) Except as otherwise provided in Section 2b below, Optionee
shall not, during the term of the Purchase Option, sell, assign, transfer,
pledge, hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively "transfer"), any of the Shares.
(b) Notwithstanding the foregoing, Optionee may transfer Shares to
or for the benefit of any spouse, child or grandchild, or to a trust for their
benefit, provided that such Shares shall remain subject to this Agreement
(including, without limitation, the restrictions on transfer set forth in this
Section 2 and such permitted transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such transferee
shall be bound by all of the terms and conditions of this Agreement.
(c) Optionee shall not transfer any of the Shares except by a
transfer that satisfies the following requirements:
(i) If Optionee proposes to transfer any Shares (the
"Offered Shares"), then Optionee shall first give
written notice of the proposed transfer (the "Transfer
Notice") to the Company. The Transfer Notice shall name
the proposed transferee(s) and state the number of
shares to be transferred, the price per share and all
other material terms and conditions of the transfer.
(ii) For thirty (30) days following receipt by the Company of
such Transfer Notice, the Company shall have the option
to purchase all or any lesser part of the Offered Shares
at the price and upon the terms set forth in the
Transfer Notice. In the event the Company elects to
purchase all of the Offered Shares, it shall give
written notice of its election to Optionee within such
30-day period and the settlement of the sale of such
Offered Shares being purchased by the Company shall be
made as provided below in Section 2c(iv).
(iii) If the Company does not elect to acquire all of the
Offered Shares, the Company shall, within 30 days after
receipt of Optionee's Transfer Notice, give written
notice of its decision to such holders of Common Stock
or Preferred Stock (if any) of the Company as the
Company deems appropriate ("Eligible Stockholders").
Such notice shall state the number of Offered Shares
available for purchase. Each Eligible Stockholder shall
be entitled to purchase that proportion of the Offered
Shares available for purchase as the number of shares of
Common Stock owned by him or her bears to the total
number of issued and outstanding shares of Common Stock
of the Company then owned by all Eligible Stockholders.
For this purpose, any shares of
-7-
Preferred Stock of the Company then outstanding shall be
treated as if converted into the number of shares of
Common Stock into which such shares may then be
converted. Within ten days after mailing of such notice
to the Eligible Stockholders, each Eligible Stockholder
shall give written notice to the Company and to Optionee
stating how many additional shares such Eligible
Stockholder win purchase if additional Offered Shares
are made available. If an Eligible Stockholder fails to
respond in writing within this ten-day period to the
notice given by the Company, the right of such Eligible
Stockholder to acquire his or her proportionate part of
the Offered Shares shall terminate. If one or more
Eligible Stockholders does not elect to acquire his or
her full pro rata shares of the Offered Shares
available, these Offered Shares shall be allocated to
each other Eligible Stockholder in the same proportion
as the Eligible Stockholders holdings of Common Stock
bears to the aggregate of all Eligible Stockholders
holdings of Common Stock (treating all shares of
Preferred Stock, if any, as if converted into Common
Stock). If any Eligible Stockholder is thereby given the
right to purchase a greater number of Offered Shares
than he or she has subscribed for, the excess shall be
reallocated to the other Eligible Stockholders on the
same proportionate basis described above. The Company
shall allocate and reallocate the shares available
according to this procedure, but it shall have
discretion to allocate amounts of less than 100 shares
as it sees fit in its sole discretion. All allocations
and reallocations pursuant to this Section 2c(iii) must
be completed within 14 days after the end of the ten-day
period referred to above.
(iv) If the Company and/or Eligible Stockholders elect to
acquire all, but not less than all, of the Offered
Shares of Optionee as specified in Optionee's Transfer
Notice, the Company shall so notify Optionee and
settlement shall be made at the principal office of the
Company in cash within 60 days after the Company
receives Optionee's Transfer Notice; provided that if
the terms of payment set forth in Optionee's Transfer
Notice were other than cash against delivery, the
Company and/or the Eligible Stockholders may pay for
said Offered Shares on the same terms and conditions set
forth in Optionee's Transfer Notice.
(v) If the Company and/or the Eligible Stockholders do not
elect to acquire all of the Offered Shares specified in
Optionee's Transfer Notice, Optionee may, within the
60-day period following the expiration of the option
rights granted to the Company and the Eligible
Stockholders pursuant to this Section 2, transfer the
Offered Shares specified in Optionee's Transfer Notice
to the proposed
-8-
transferee(s), provided that this sale shall not be on
terms and conditions more favorable to the purchaser
than those contained in Optionee's Transfer Notice. Upon
completion of such a transfer, the transferred shares
shall thereafter be released from all restrictions under
this Section 2. If Optionee does not consummate the
transfer within such 60-day period, the rights provided
hereby shall be deemed to be revived with respect to
such shares and no transfer shall be effected without
first offering the shares in accordance herewith.
(vi) The following transactions shall be exempt from the
provisions of this Section 2c:
(A) Optionee's transfer of any or all of his shares, either
during his lifetime or death, by will or intestacy, to
his immediate family or to a trust, the beneficiaries of
which are exclusively one or more of Optionee and a
member or members of Optionee's immediate family, except
any such transfers made pursuant to any divorce or
separation proceedings or settlement. The term
"immediate family" shall mean spouse, lineal descendant,
father, mother, brother or sister of Optionee; or
(B) Any transfer pursuant to a registration statement filed
by the Company with the Securities and Exchange
Commission; provided, however, that, except with respect
to a transfer pursuant to Section 2c(vi)(B), the
transferee shall receive and hold such stock subject to
the provisions of this Agreement and there shall be no
further transfer of such stock except in accordance with
this Agreement.
(vii) The foregoing right of first refusal shall terminate
upon the closing of the first public offering of
securities of the Company that is effected pursuant to a
registration statement filed with, and declared
effective by, the Securities and Exchange Commission
under the Securities Act (as defined below) that results
in aggregate gross proceeds to the Company of at least
$7,500,001 with a net sales price per share of at least
$5.00.
3. Effect of Prohibited Transfer. The Company shall not be required
(a) to transfer on its books any of the Shares that shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (b) to treat as owner of such Shares or to pay dividends to any transferee to
whom any such Shares shall have been so sold or transferred.
4. Restrictive Legend. All certificates representing Shares shall
have affixed thereto a legend in substantially the following form, in addition
to any other legends that may be required under federal or state securities
laws: "the shares of stock represented by this certificate are subject to
-9-
restrictions on transfer and an option to purchase set forth in a certain Stock
Restriction Agreement between the Corporation and the registered owner of this
certificate (or his or her predecessor in interest), and such Stock Restriction
Agreement is available for inspection without charge at the office of the
Treasurer of the Corporation."
5. Investment Representations. Optionee represents, warrants and
covenants as follows:
(a) Optionee is purchasing the Shares for his own account for
investment only, and not with a view to, or for sale in connection with, any
distribution of the Shares in violation of the Securities Act of 1933 (the
"Securities Act"), or any rule or regulation under the Securities Act.
(b) Optionee has had such opportunity as he has deemed adequate to
obtain from representatives of the Company such information as is necessary to
permit him to evaluate the merits and risks of his investment in the Company.
(c) Optionee, along with his advisors, has sufficient experience
in business, financial and investment matters to be able to evaluate the risks
involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.
(d) Optionee can afford a complete loss of the value of the Shares
and is able to bear the economic risk of holding such Shares for an indefinite
period.
(e) Optionee understands that (i) the Shares have not been
registered under the Securities Act and are "restricted securities" within the
meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption from registration is then available;
(iii) in any event, the exemption from registration under Rule 144 will not be
available for at least two years and even then will not be available unless a
public market then exists for the Common Stock, adequate information concerning
the Company is then available to the public, and other terms and conditions of
Rule 144 are complied with; and (iv) there is now no registration statement on
file with the Securities and Exchange Commission with respect to any stock of
the Company and the Company has no obligation or current intention to register
the Shares under the Securities Act.
(f) A legend substantially in the following form will be placed on
the certificate or certificates representing the Shares: "the shares represented
by this certificate have not been registered under the Securities Act of 1933,
as amended, and may not be sold, transferred or otherwise disposed of in the
absence of an effective registration statement under such Act or an opinion of
counsel satisfactory to the corporation to the effect that such registration is
not required."
6. Adjustments for Stock Splits, Stock Dividends, etc.
(a) If from time to time during the term of this Agreement there
is any stock split stock dividend, stock distribution or other reclassification
of the Common Stock of the Company, any
-10-
and all new, substituted or additional securities to which Optionee is entitled
by reason of his ownership of the Shares shall be immediately subject to, the
restrictions on transfer and other provisions of this Agreement in the same
manner and to the same extent as the Shares.
(b) If the Shares are converted into or exchanged for, or
stockholders of the Company receive by reason of any distribution in total or
partial liquidation, securities of another corporation, or other property
(including, without limitation, cash), pursuant to any merger of the Company or
acquisition of its assets, then the rights of the Company under this Agreement
shall inure to the benefit of the Company's successor and this Agreement shall
apply to the securities or other property received upon such conversion,
exchange or distribution in the same manner and to the same extent as to the
Shares, except as otherwise provided herein.
7. Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
8. Waiver. Any provision contained in this Agreement may be waived
on behalf of the Company, either generally or in any particular instance, by the
Board of Directors of the Company.
9. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and Optionee and their respective heirs, executors,
administrators, legal representatives, successors and assigns, subject to the
restrictions on transfer set forth in Sections 2 of this Agreement.
10. No Rights To Employment. Nothing contained in this Agreement
shall be construed as giving Optionee any right to be retained, in any position,
or as an employee of the Company.
11. Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or upon deposit with
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath his or its
respective signature to this Agreement, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 11.
12. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice-versa.
13. Entire Agreement. This Agreement constitutes the entire
agreement between the parties, and supersedes all prior agreements and
understandings, relating to the subject matter of this Agreement.
14. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and Optionee.
-11-
15. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
TELEPAD CORPORATION
__________________________ __________________________
By: By:
SSN:________________
-12-
